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In defense of Michelle Malkin

August 3, 2009 10:54 amAugust 3, 2009 10:54 am

No, really. She’s been getting a lot of grief from progressive bloggers for saying that extended unemployment benefits cause higher
unemployment, and attributing that view to Larry Katz, who has gone to some pains to say that he believes no such thing.

But while Larry Katz doesn’t believe that unemployment has surged because the government has made being unemployed such a great deal, Casey Mulligan of the University of Chicago does — or at least he has been saying that unemployment is high not because employers have become less willing to hire, but because workers have become less willing to work. So Ms. Malkin’s theory of unemployment
is no crazier than what’s coming out of some of our leading universities.

By the way, since I had to go through Casey Mulligan’s archives to do this post, I thought some readers might be interested in this gem.

Casey Mulligan is an astounding example of the disconnect between high-level intelligence and/or honesty (unwillingness to intentionally mislead for political or personal reasons), and advancement in the academic
world, which is so based on publication which can be done in abundance with just good mechanical skills and workaholism and high endurance from an early age.

Having been through 2 extended periods of unemployment, as a ‘professional’ with arcane & obsolete computer skills, aging, unwilling to move due to family needs, etc., I think it’s
quite possible that ‘benefits’ drag out unemployment, otherwise I would be punditing or flipping burgers long since, homeless otherwise perhaps.

Talk about your parallel universes; in the post you list, Prof. Mulligan says in his follow-on post he’ll explain why people might be less willing to work. His conclusion? The mortgage modification programs
are supposed to adjust your mortgage based on your income. So, less income, lower mortgage payments. In that universe, people are dropping out of the workforce voluntarily, cheating the mortgage adjustment system
so their payments go down for the long-run, then going back to work.

Except that the mortgage adjustments aren’t really happening. Every month there’s a new round of hand-wringing over how few modifications are happening.

I bet in his parallel universe, the people successfully making mods are the people who are getting out of their jobs to game the system. See! In U of Chicago universe, neither mortgage modifications nor unemployment
insurance make sense! People will just use one to cheat the other!

The really sad thing is that most of us would never think of taking such drastic measures to cheat the system. Those who would are either studying at U of Chicago or working on Wall Street.

If only the workers of America weren’t such worthless, lazy people, we’d have full employment today.

What a joke. What an absolute joke that Mulligan is paid to teach garbage to students and write about garbage the NY times.

Unemployment has risen dramatically because consumers have been squeezed to the max by the elite leaders of American business – leaders who feel the only capital investments they need to concern themselves
about are their compensation and retirement packages. And if you’re John Thain, you invest millions the trappings of the office too, though your company bled billions in one quarter alone….

The weak correlation between asset prices and non-financial sector performance and the strong profitability of today’s non-financial capital are two good reasons to scoff at the idea that the non-financial
sector will collapse because of the recent events on Wall Street, and even better reasons to scoff at the Bernanke-Paulson-Bush idea that a massive bailout of financial firms is the key to avoiding a non-financial
collapse. Wall Street’s woes are and will be largely limited to Wall Street.

The idea that unemployment benefits results in a lowered willingness to take employment works if, and only if, the benefits exceed the net proceeds from employment (assuming rationality). So, an unemployed auto
worker might well pass up a minimum wage burger flipping job. However, going from say $18 / hour to $8 /hour will have an adverse effect on the worker’s buying power in any event.

I knew what she meant. I heard her echo it this week on Stephanopoulos . But, I thought it was not applicable to the “current” situation. It was negating the fear and uncertainty of “IF benefits
will be extended”, the fact that unemployment is still rising and thousands of job applications exist for 1 job opening.

Now, in her defense once these factors ease, we may have a period of what she mentioned.

“Keeping in mind the criticism of those who say expanded unemployment benefits keep people from working, Mr. Rockwell conceded he might appear to be too picky in the jobs he would accept. He has mostly ruled
out commuting to Tampa, a much larger city an hour away, because of the distance. He has also tried to confine himself to looking for management-level restaurant jobs.

“I’m not going to clean grills, take out the garbage,” Mr. Rockwell said. “I’ve done that before, but I feel I’m beyond that.”

It’s really sad, but this guy has options other than unemployment checks. When I lost a job in 2004 I took part-time work, beneath my previous employment, rather than collect unemployment checks.

Oh sure, unemployment benefits are a disincentive to work. I have been out of work since last December. The benefits in AZ amount to $960 per month. That money just wants me to laze around and do nothing. How laughable.

On the trend in commercial real estate inventory, Mulligan was right — there was no manic ’80s-style building boom this decade. The problems are leverage and a massive contraction in retail —
the latter being the echo of the housing bust. Another housing bust echo is the contraction of demand for office space by the financial services industry.

I did not see the introductions so when I first heard her speak I first thought, “she’s not very bright, how’d she get on?” Actually I thought something slightly different but will not
write it because I want to get by the moderator.

Then I realized who she was and wondered whether it was responsible for ABC to put her on because she represents a certain (significant) political persective or irresponsible because she said (again for your moderator)
such not very bright things?

There is a problem with representative democracy. The average IQ is 100. Bright enough for contributing happily and productively in a simple aggrarian society. For the complex political- ecomomic-technological society
that has developed, not so much. Don’t know the answer to the problem, but it is a problem.

So, I’m curious to hear your refutation of Casey’s data in the post. Why has efficiency gone up? I’m pretty skeptical of his claims, and considering that they’re basically couched as
an argument from authority (the formula says so! Trust me!) I have no idea how to evaluate them, being a mere physicist.

Malkin and Katz bring out good points but we need a solution to the problem. The solution comes right out of the great Depression, something like the CCC, (Civilian Conservation Corps?). There was also the concept
of Workfare as opposed to Welfare. Or maybe the unemployed could do something akin to volunteer work to obtain their benefits. Another possibility would be to retrain in areas where there were plenty of jobs
available and needed (say nursing assistants when we get health care expanded?).

The comments to the Mulligan gem were far more insightful than the gem itself. Lest we forget, however, in the fresh water mentality, all of this is the result of the sudden increase around December 2007 of Americans’
preferences for leisure.

Forgot to add this to my comment above but just a chuckle for everyone. Talking about Michelle Malkin, in the column to my right there’s an add, including her picture, to read Ann Coulter’s weekly
column for free